HomeMy WebLinkAboutC.054.93010_0942 (2)IREDELL COUNTY BOARD OF COMMISSIONERS
BRIEFING MINUTES
NOVEMBER 4. 2002
The lredell County Board of Commissioners met in Briefing Session on Monday,
November 4, 2002, beginning at 4:00 p.m., in the lredell County Government Center, 200
South Center Street, Statesville, NC.
Present: Chairman Sara Haire Tice
Vice Chairman Karen B. Ray
Tommy E. Bowles
r'.
Steve D. Johnson
R. Godfrey Williams
-----------------------4:00 P -M -----------------------------------------
—
PRESENTATION REGARDING THE REFINANCING OF THE SERIES 1992
TER
6.1 5%) ANDFPOSSIBLYTHE
THE SERIES2interest
000 INSTALLMENT PAYMENT
REVENUE BONDS (current interest rate of 5.66%)
Staff Present: County Manager Joel Mashburn, Finance Director Susan
Blumenstein, and Clerk to the Board .lean Moore.
Guests: Banc of America Securities representatives Robert Hobson and Edward
Boyles along with Gene Cahalan with Efficient Capital Corporation. (Cahalen is a
financial advisor.)
Mrs. Blunmenstein said the Series 1992 refunding could be done using a traditional
method, and the savings could be substantial. She said, however, a refinancing of the
Series 2000 bonds would be more complicated, and she could not at the present time
encourage the county to proceed. Blumenstein said this was partly due to the county's
bond counsel in New York not being able to obtain an opinion from the tax attorney to go
forward on the project. Mrs. Blumenstein said the Series 2000 refinancing would require
what was known as a "synthetic refunding." She said that due to additional information
being needed about the refunding, the meeting would be considered for informational
purposes rather than about a specific deal. She also said no county resources had been
committed to the refunding.
Hobson shared the following chart that compared the two types of refinancing
methods for the Series 2000 bonds.
— — $17,440,000 $17,44QU
Par
--- 5.125"/0-6.00/0 5.125%-6.
Interest Rates —_ _ 5.66"/0
,rave Old Rate 5.66
New Interest Rates
1.72% - 4.92%
S.4J% (awe
3.84 (Swap Rate
Average New Rate
4.56%
Fees
Annual Savins —
$31,000
( )
$62,0
$819,(
Net Present V alue Savings-$
$368,046) --
.__—_
___
NPresent Value Savings-%
et
(2.1 lino)
_ 4.69'
Mr. Hobson continued by saying a synthetic refunding would require the county
to enter into a contract with the Bank of America and exchange a fixed rate payment in
return for a floating rate. He said the transaction could be risky if the floating rate did not
correlate to the actual rate being paid to the bondholders. Hobson said that if this
happened, the county could lose money, but it was not likely. He said his optimism was
based on the past 10-15 year history on the interest rates.
Commissioner Ray asked if there was a cap on the floating rate.
Boyles said there was not.